Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the best-preserved paper copies, scanning those copies,1

and then making the scanned versions text-searchable.2

Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.                                                                    1  In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing).  2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. 

Content last modified 6/05/2009.  

CONFIDENTIAL (FR)

SUPPLEMENT

CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for theFederal Open Market Committee

By the StaffBoard of Governors

of the Federal Reserve SystemMay 23, 1969

SUPPLEMENTAL NOTES

The Domestic Economy

Unit sales of new domestic autos declined somewhat in the

second ten days of May from the advanced level of the first selling

period. For the first 20 days of May, sales were at an annual rate of

8.6 million units--compared with 8.2 million units in April and 8.7

million units a year earlier.

The composite leading indicator rose to a new high in April.

The coincident indicator continued to rise fractionally, and the lagging

indicator declined slightly.

COMPOSITE CYCLICAL INDICATORS1963 = 100

12 Leading 5 Coincident 6 LaggingIndicators Indicators Indicators

1969 - January 144.3 164.7 177.8February 146.4 166.4 181.1March 145.1 167.3 182.3April 148.2p 16 7.7p 18 1.1p

In addition to those April increases in components of the

leading indicator already reported in the Greenbook, nonagricultural

placements, durable new orders, and plant and equipment contracts and

orders were strong. To the extent that the April jump in the composite

resulted from a bulge in machinery and equipment orders placed in

anticipation of suspension or repeal of the investment tax credit, it

is likely that the series will fall back in May.

The Domestic Financial Situation

Mortgage market. In April, the backlog of outstanding

mortgage commitments--chiefly for residential loans--rose again at all

savings and loan associations and New York State mutual savings banks

after adjustment for seasonal variation. The level of the backlog

reached in April was a fifth above a year earlier, when average housing

prices and loan amounts were smaller. However, the current backlog

remains extremely large relative to recent cash flows.

The volume of new commitments approved by these institutions,

after allowance for seasonal variation, also increased during the

month, according to FRB derived estimates. The rise in new commitments

apparently reflected a more optimistic near-term assessment of cash

flows by these lenders, following the March-April reinvestment and tax

period. Moreover, the liberal advance policy expressed by the Federal

Home Loan Bank Board may have given some additional stimulus to sav-

ings and loan association lending.

RESIDENTIAL MORTGAGE COMMITMENTS OUTSTANDINGAT SELECTED THRIFT INSTITUTIONS

Outstanding Commitments Month-to-Month Change

Date All Savings 'Mutual All Savings MutualTotal and Loan Savings Banks Total and Loan Savings Banks

Associations (N.Y. State) Associations (N.Y. State)($ Billions, Seasonally Adjusted) (Per Cent)

1968

January 8.4 5.8 2,6 -0.6 -0.01 -1.8February 8.4 5.9 2.5 0.5 1.6 -2.0March 8.6 6.1 2.5 2.0 2.5 1.0April 8.7 6.2 2.5 1.6 2.3 0May 8.6 6.0 2.6 -1.5 -2.4 0.8June 8.6 5.9 2.6 -0.5 -1.7 2.3July 8.8 6.1 2.7 2.8 2.7 3.2August 9.0 6.1 2.9 1.8 -0.02 5.9September 9.1 6.2 2.9 1.5 1.6 1.4October 9.5 6.4 3.0 3.9 3.6 4.4November 9.7 6.5 3.2 2.8 1.5 5.5December 9.7 6.6 3.1 -0.2 1.3 -3.0

1969

January 9.9 6.7 3.2 1.5 1.2 2.2February 10.1 6.9 3.2 2.6 3.3 1.1March 10.3 7.0 3.3 1.7 1.4 2.3April 10.5 7.2 3.3 1.7 2.5 0.2

Note: Based on seasonally adjusted dollar volume. Data from Federal Home LoanBank Board and Savings Banks Association of New York State. Reportingsavings banks account for about 70 per cent of total mortgage lending inthe industry. Data for savings banks and S&L's include a minor amountof nonresidential commitments. Subtotals may not add to totals becauseof rounding.

Interest rate changes. Yields on Treasury bills have dropped

around 5 to 10 basis points since Tuesday, as continuing moderate

demands for bills have run into a very thin immediate market supply.

Dealers' total bill holdings on May 21 amounted to only $1.1 billion.

Included in the total were net short positions of more than $100 million

in the under 3-month maturity area, and around $675 million of bills not

immediately available for trading, and secured by long-term repurchase

agreements. Bill yields have also been affected recently by the

Treasury's announcement that in next week's monthly bill auction it will

redeem the $200 million added to the maturing issue by the February

bill-strip auction.

While yields on intermediate-term Treasury coupon issues have

also edged a little lower recently, due largely to official account

buying, yields on long-term bonds have advanced another 5 basis points.

The latter increase has reflected selling by investors seeking to

obtain funds for payment of subscriptions to recently offered corporate

bonds. Rates on certain short-term debt instruments other than U.S.

Government securities have also advanced since publication of the

Greenbook. For example, yields on short-term Federal Agency debt have

risen another 5 to 10 basis points; commercial paper rates are up 1/8

of a percentage point; and the weekly 1-year prime municipal series has

advanced 15 basis points.

KEY INTEREST RATES

'1969Lows Highs April 30 May 22

Short-Term Rates

Federal funds (weekly average)

3-monthsTreasury bills (bid)Bankers' acceptancesEuro-dollarsFederal agenciesFinance paperCD's (prime NYC)

Highest quoted new issueSecondary market

6-monthsTreasury bills (bid)Bankers' acceptancesCommercial paperFederal agenciesCD's (prime NYC)

Highest quoted new issueSecondary market

1-yearTreasury bills (bid)Prime municipals

Intermediate and Long-Term

Treasury coupon issues5-years20-years

CorporateSeasoned Aaa

BaaNew Issue Aaa

No call protectionCall protection

MunicipalBond Buyer IndexMoody's Aaa

Mortgage--implicit yieldin FNMA weekly auction 1/

5.95 (1/1)

5.916.387.146.086.25

(3124)(2/17)(1/2)(3/26)(2/6)

6.006.45 (2/13)

6.046.506.256.32

(3/25)(2/17)(1/7)(1/16)

6.256.50 (1/30)

5.86 (1/16)3.90 (1/2)

6.11 (1/20)5.91 (4/14)

6.56 (1/2)7.26 (2/3)

7.05 (1/9)6.90 (2/20)

4.82 (1/23)4.57 (1/2)

7.66 (1/9)

8.91 (5/21)

6.257.509.556.856.88

(1/7)(5/22)(5/22)(5/22)(5/22)

6.007.40 (5/22)

6.427.627.386.77

(1/7)(5/22)(5/22)(5/22)

6.257.50 (5/22)

6.39 (2/27)4.55 (3/20)

6.56 (5/22)6.32 (3/18)

7.00 (3/28)7.64 (3/28

7.45 (4/9)7.57 (3/21)

5.46 (5/22)5.30 (5/22)

8.17 (3/3)

7.79 8.91 (5/21)

5.877.008.516.516.75

6.027.509.556.856.88

6.00 6.007.00 7.40

5.967.127.136.51

6.097.627.386.77

6.25 6.257.10 7.50

5.93 6.034.05 4.40

6.37 6.565.98 6.18

6.81 6.787.50 7.55

7.18 7.28

5.10 5.464.95 5.30

7.92 7.88

1/ Yield on 6-month forward commitment after allowance for commitment fee andrequired purchase and holding of FNMA stock. Assumes discount on 30-yearloan amortized over 15 years.

International Developments

On page II - 5 of the May 21 Greenbook it was incorrectly

stated that the downward revision in the estimated net export balance

for the third and fourth quarters largely reflects "growing pessimism

on the outlook for exports." Actually, the principal reason for the

revision is a substantial increase in the estimate for U.S. merchandise

imports, as briefly noted at page IV - 4. Also, the projection of

imports of services includes substantially larger interest payments

than earlier calculations allowed for.

The new import estimate reflects the use of estimating

techniques that place somewhat greater weight than before on the effects

of the continuing rise in U.S. prices and less on the moderation in the

pace of real growth after 1968. Merchandise imports in the second half

are now projected at an annual rate of $37.3 billion, up 9 per cent

from the second half of 1968. A month ago this import increase was

projected at only 6 per cent, and in the Staff Projection of February 25

(published in the March Bulletin) the implied rise in imports between

second halves of 1968 and 1969 was only 3 per cent.

With regard to merchandise exports, prospects for which were

discussed at pages IV - 3 and 4, the latest revisions of earlier esti-

mates are downward for commercial aircraft (untilBoeing 747's begin to

be shipped next year), downward also for agricultural exports, but

upward for nonagricultural exports other than aircraft and autos on

account of "stronger demand pressures in Europe than earlier assumed"

(p. IV - 4).

The large revision in second quarter net exports of goods and

services from the earlier projected $6 billion to $2.7 billion, annual

rate, is due in minor part to upward revisions for imports of goods and

services, but three-fourths of the revision comes from re-estimation of

after-effects of the port strike on U.S. merchandise exports. March

exports were somewhat larger than had been estimated, and on this

account the amount of second quarter exports postponed from the first

quarter is now guessed to be $200 million less than before. More impor-

tant, it is now assumed that $200 million of agricultural exports and

$200 million of nonagricultural exports were completely lost in the

first quarter, and would therefore not help to swell second quarter

exports. No appreciable revision has been made in the estimate of the

underlying trend of exports adjusted for effects of the port strike.

Corrections

Page II - 5. End of line 9 and line 10 should read "mainly

reflecting a significantly larger volume of imports than had been pro-

jected earlier."

Page II - 32, second paragraph, line 3, "in 1968" should be

transferred to end of sentence.

Page IV - 12, the missing page reference is to pages IV - 7

to 10.

SUPPLEMENTAL APPENDIX A: SURVEY OF BANK LENDING PRACTICES. MAY 1969

Respondents in the May 15 Bank Lending Practices Survey generallyindicated--as they did in the previous survey--that they were continuingto experience and to expect stronger loan demand and that they had tightenedlending terms and conditions further. Nearly two-thirds of the banksstated that demand for business loans had strengthened in the precedingthree months, and almost one-half reported that they expected business

loan demand to strengthen further in the next three months. (Table 1).Virtually none of the respondents thought that business loan demand hadweakened over the previous three months, or that it would weaken in the

coming three months.

Most banks firmed substantially further their terms and condi-

tions on loans to nonfinancial businesses. Over 90 per cent of the res-pondents indicated that they had raised interest rates on loans to suchbusinesses--probably reflecting the March increase in the prime rate--while more than 75 per cent stiffened policies with regard to compensatingbalance requirements. Moreover, about 70 to 80 per cent of the banksfollowed more restrictive policies when reviewing credit lines or loanapplications to new or nonlocal service area customers and almost 50 percent had firmed these policies with regard to established or local ser-vice area customers. And around 70 per cent of the respondents reportedthat factors such as the value of the borrowe as a depositor, the sourceof collateral, and the intended use of the loan were scrutinized moreclosely in business loan applications, while about 40 per cent firmed

policies in connection with standards of credit worthiness and the matu-rity of term loans.

Lending terms and conditions to "noncaptive finance companies"were also tightened significantly further. About 65 per cent of the banks

stated that they were less willing to establish new or larger credit linesto these borrowers and more than 50 per cent had raised interest rateson finance company loans. while less than 30 per cent had tightened com-pensating balance requirements, almost 45 per cent of the banks had adoptedmore strict enforcement of these requirements.

Moreover, bank willingness to make certain other types of loanswas also reduced further in the past three months. Banks were particularlymore reluctant to grant term loans, with nearly two-thirds of the respon-dents reporting this policy position. Mortgage loans also came under in-creasing pressure with about 45 per cent of the banks indicating that theywere less willing to make single family mortgage loans, while around 60per cent were less willing toaccommodate demand for other types of mort-gage loans. Approximately 40 per cent of the respondents were less willingto grant loans to brokers and participation loans to correspondent banks.However, less than 20 per cent of the banks indicated greater reluctanceto grant loans in the relatively profitable consumer instalment area.

SA-2

There was no significant size of bank variation in the responsesto the current survey, with about the same percentage of larger banks(deposits $1 billion or more) and smaller banks (deposits of less than$1 billion) indicating strength in current and anticipated business loandemand and firming in lending terms and conditions (Table 2). This isin contrast with the February survey in which a greater percentage oflarger than smaller banks reported strength in current and expected loandemand as well as firming of lending terms and conditions.

Banks that firmed lending policies in the current survey usuallygave reduced availability and increased cost of funds and strong loandemands as the major reasons for more restrictive lending terms and con-ditions. A few mentioned that their loan/deposit ratios were higher thananticipated, and one bank stated that this ratio was as high as in late1966. Another bank also cited the limited availability of funds in theEuro-dollar market as a reason for their stiffer lending policies.

NlT FOR QUOTATInN OR PUBLIrATION TABLE 1

QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICESAT SELECTED LARGE BANKS IN THE U.S. 1/

(STATUS OF POLICY ON MAY 15, 1969 COMPARED TO THREE MONTHS EARLIER)(NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING)

STRENGTH OF DEMAND FOR COMMERCIAL ANDINDUSTRIAL LOANS (AFTER ALLOWANCE FORBANK'S USUAL SEASONAL VARIATION)

COMPARED TO THREE MONTHS AGO

ANTICIPATED DEMAND IN NEXT 3 MONTHS

LENDING TO .NONFINANCIAL BUSINESSES

TOTAL

BANKS PCT

123 100.0

122 100.0

ANSWERINGQUESTION

BANKS PCT

MUCHSTRONGER

RANKS PCT

18 14.6

10 8.2

MUCHFIRMERPOLICY

BANKS PCT

MODERATELYSTRONGER

BANKS PCT

60 48.8

47 38.5

MODERATELYFIRMERPOLICY

BANKS PCT

ESSENTIALLYUNCHANGED

BANKS PCT

41 33.3

59 48.4

ESSENTIALLYUNCHANGEDPOLICY

BANKS PCT

MODERATELYWEAKER

BANKS PCT

MODERATELYEASIERPOLICY

BANKS PCT

MUCHWEAKER

BANKS PCT

MUCHEASIERPOLICY

BANKS PCT

TERMS AND CONDITIONS:

INTEREST RATES CHARGED

COMPFNSATING OR SUPPORTING BALANCES

STANDARDS OF CREDIT WORTHINESS

MATURITY OF TERM LOANS

REVIEWING CREDIT LINES OR LOAN APPLICATIONS

ESTABLISHED CUSTOMERS

NEW CUSTOMFRS

LOCAL SERVICF AREA CUSTOMERS

NONLOCAL SERVICE AREA CUSTOMERS

1/ SURVEY OF LFNDING PRACTICES AT 124 LARGEAS nF MAY 15, 1969.

100.0

100.0

100.0

100.0

123 100.0

121 100.0

122 100.0

122 100.0

BANKS REPORTING IN THE FEDERAL RESERVE QUARTERLY INTEREST RATE SURVEY

PAGE 01

38.2

27.6

13.8

17.1

4.9

43.0

5.7

41.8

52.8

48.0

27.6

25.2

42.3

37.2

41.0

29.5

9.0

24.4

58.6

57.7

52.8

19.8

53.3

28.7

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

*"T rOR ;IJlTATION OR PUBLICATION

ANSWERINGQUESTION

BANKS PCT

MUCHFIRMERPOLICY

BANKS PCT

MODERATELYFIRMERPOLICY

BANKS PCT

ESSENTIALLYUNCHANGEDPOLICY

BANKS PCT

MODERATELYEASIERPOLICY

BANKS PCT

MUCHEASIEAPOLICY

BANKS PCT

FACTORS RELATING TO APPLICANT 2/

VALUE AS DEPOSITOR ORSOURCE OF COLLATERAL BUSINESS

INTENDED USE OF THE LOAN

LENDING TO "NONCAPTIVE" FINANCE COMPANIES

TERMS AND CONDITIONS:

INTEREST RATES CHARGED

COMPENSATING OR SUPPORTING BALANCES

ENFORCEMENT OF BALANCE REQUIREMENTS

ESTABLISHING NEW OR LARGER CREDIT LINES

122 100.0

123 100.0

100.0

100.0

100.0

100.0

WILLINGNESS TO MAKF OTHER TYPFS OF LOANS

TFRM LOANS TO BUSINESSES

CONSUMER INSTALMENT LOANS

SINGLE FAMILY MORTGAGE LOANS

MULTI-FAMILY MORTGAGF LOANS

ALL OTHFR MORTGAGE LOANS

PARTICIPATION LOANS WITHCORRESPONDENT BANKS

LOANS TO BROKERS

ANSWERINGQUESTION

BANKS PCT

123 100.0

122 100.0

121 100.0

120 100.0

121 100.0

122 100.0

120 100.0

CONSIDERABLYLESS

WILLING

BANKS PCT

28 22.8

2 1.6

20 16.5

25 20.8

27 22.3

9.0

13.3

MODERATELYLESS

WILLING

BANKS PCT

51 41.5

21 17.2

36 29.8

44 36.7

48 39.7

36 29.5

32 26.7

ESSENTIALLYUNCHANGED

BANKS PCT

44 35.7

97 79.6

64 52.9

51 42.5

46 38.0

75 61.5

72 60.0

MODERATELYMORE

WILLING

BANKS PCT

CONSIDERABLYMORE

WILLING

BANKS PCT

0.0

1.6

0.8

0.0

0.0

0 0.0

0 0.0

2/ FOR THESE FAC IRS, FIRMER MEANS THE FACTORS WERE CONSIDERED MORE IMPORTANT IN MAKING DECISIONS FORCREDIT REQUESTS, AND EASIFR MEANS THEY WERE LESS IMPORTANT.

40 32.8

35 28.4

32.0

35.8

16.4

10.7

17.2

44.3

43 35.2

44 35.8

34.4

17.2

25.4

18.9

0.0

0.0

0.0

0.0

0.0

0.0

49.2

72.1

57.4

36.0

0.0

0.0

0.0

0.8

APPROVING

TABLE 1 (CONTINUED) PAGE 02

NOT FOR QUOTATION OR PUBLIraTION TABLE 2

COMPARISON OF QUARTERLY CHANGES IN BANK LENDING PRACTICES AT BANKS GROUPED BY SIZE OF TOTAL DEPOSITS 1/(STATUS OF POLICY ON MAY 15, 1969. COMPARED TO THREE MONTHS EARLIER)

(NUMBER IN BANKS IN EACH COLUMN AS PER CENT OF TOTAL BANKS ANSWERING QUESTION)

TOTAL

STRFNGTH OF DEMAND FOR CCMMFRCIAL ANDINDUSTRIAL LOANS (AFTER ALLOWANCF FORBANK'S USUAL SEASONAL VARIATION)

COMPARED TO THRFF MONTHS AGO

ANTICIPATED DEMAND IN NFXT 3 MONTHS

$1 & UNDEROVER $1

100 100

100 100

TOTAL

$1 & UNDEROVER $1

LENDING TO NONFINANCIAL BUSINESSFS

TFRMS AND CONDITIONS:

INTEREST RATES CHARGED 100 100

COMPENSATING OR SUPPORTING BALANCES 100 100

STANDARDS nF CREDIT WORTHINFSS 100 100

MATURITY OF TERM LOANS 100 100

REVIEWING CREDIT LINES OR LOAN APPLICATIONS

ESTABLISHED CUSTOMERS 100 100

NEW CUSTOMERS 100 100

LOCAL SERVICF AREA CUSTOMERS 100 100

NONLOCAL SERVICE ARFA CUSTOMERS 100 100

SIZE OF BANK

MUCHSTRONGER

$1 & UNDEROVER $1

MUCHFIRMER

$1 & UNDEROVER $1

-- TOTAL DEPOSITS IN BILLIONS

MODERATELYSTRONGER

$1 & UNDEROVER $1

MODERATELYFIRMER

$1 & UNDEROVER $1

ESSENTIALLYUNCHANGED

$1 & UNDEROVER $1

ESSENTIALLYUNCHANGED

MODERATELYWEAKER

$1 E UNDEROVER $1

4 3

4 5

MODERATELYWEAKER

MUCHWEAKER

$1 E UNDEROVER L$

MUCHWEAKER

$1 C UNDER $1 & UNDER $1 & UNDEROVER ' $1 OVER $1 OVER $1

29 28

1/ SURVEY rF LENDING PRACTICES AT 46 LARGE BANKS (DEPOSITS OF $1 BILLION OR MORE) AND

$1 RILLION) REPORTING IN THE FFOERAL RESFRVE QUARTFRLY INTEREST RATE SURVEY AS OF78 SMALL BANKS (I

MAY 15, 1969.DEPOSITS OF LESS THAN

PAGE 03

,1T crq 3TV~TTIT 'IN R PtLILI C TInPAGE 04

NUMBERANSWERINGQUESTION

FACTORS RELATING TO APPLICANT 2/

VALUF AS DEPOSITOR ORSOURCE OF COLLATERAL BUSINFSS

INTENDED USF OF THE LOAN

LENDING TO "NONCAPTIVE" FINANCE COMPANIES

TERMS AND CONDITIONS:

INTEREST RATFS CHARGED

COMPENSATING OR SUPPORTING BALANCES

ENFORCEMENT OF BALANCE REQUIREMENTS

FSTABLISHING NEW OR LARGER CREDIT LINES

$1 & UNDEROVER $1

1100 100

100 100

SIZE OF BANKMUCH

FIRMERPOLICY

$1 & UNDEROVER $I

-- TOTAL DEPOSITS IN BILLIONSMODERATELY ESSENTIALLY MODERATELY

FIRMER UNCHANGED EASIERPOLICY POLICY POLICY

$1 & UNDER $1 C UNDER $1 E UNDEROVFR $I OVER $1 OVER $1

33 36 31 34 0 0

33 38 30 27 0 0

MUCHEASIERPOLICY

$1 & UNDEROVER $1

WILLINGNESS TO MAKE OTHER TYPES OF LOANS

TERM LOANS TO BUSINFSSES

CONSUMER INSTALMENT LOANS

SINGLE FAMILY MORTGAGE LOANS

MULTI-FAMILY MORTGAGE LOANS

ALL OTHER MORTGAGE LOANS

PARTICIPATION LOANS WITHCORRESPONDENT BANKS

LOANS TO ROKERS

NUMBERANSWERINGQUESTION

$1 & UNDEROVFR $1

CONSIDERABLYLESS

WILLING

$1 E UNDEROVER $1

MODERATELYLESSWILLING

$1 G UNDEROVER $1

ESSENTIALLYUNCHANGED

$1 & UNDEROVER $1

MODERATELYMORE

WILLING

$1 & UNDEROVER $1

CONSIDERABLYMORE

WILLING

$1 & UNDEROVER $1

100 100

100 100

'/ FOR THESF FACTORS, FIRMER MEANS THE FACTORS WERE CONSIDERED MORE IMPORTANT IN MAKINGCREDIT REQUEST, AND EASIER MEANS THEY WERE LESS IMPORTANT.

DECISIONS FOR APPROVING

TABLF 2 (CONTINUFD)

TABLE 2-A

NET RESPONSES OF BANKS IN LENDING PRACTICES SURVEYS(In per cent)

May Aug. Nov. Feb. May Aug. Nov. Feb. May1967 1967 1967 1968 1968 1968 1968 1969 1969

Strength of loan demand-'(compared to 3 months ago)

Anticipated demand in next 3 months

LENDING TO NONFINANCIAL BUSINESSES -2

12.0 20.2 18.8 -8.0 64.844.4 63.2 71.2 50.0 66.4

-2.4 25.6 54.4 60.0- 20.8 49.2 41.8

Terms and Conditions

Interest rates chargedCompensating or supporting balancesStandards of credit worthinessMaturity of term loans

Reviewing Credit Lines

Established customersNew customersLocal service area customersNon-local service area customers

Factors Relating to Applicant(Net percentage indicating more important)

Value of depositor as source of businessintended use of loan

LENDING TO NONCAPTIVE FINANCE COMPANIES2 /

Terms and Conditions

Interest rates chargedCompensating or supporting balancesEnforcement of balance requirementsEstablishing new or larger credit lines

WILLINGNESS TO MAKE OTHER LOANS-

Term loans to businessesConsumer instalment loansSingle-family mortgage loansMulti-family mortgage loansAll other mortgage loansParticipation loans with correspondentbanks

Loans to brokers

6.3 25.6 20.0 19.2 54.4-13.4 10.4 14.4 12.0 44.4

-14.22.44.8

- 5.6

-21.5-31.2-53.2-17.0-28.3

6.49.6

14.413.7

6.4-16.1- 8.29.09.8

-24.2 - 6.4-13.8 1.6

10.411.217.614.4

11.2-16.1

4.114.014.0

- 4.83.2

22.45.6

12.87.2

- 4.0-22.6- 4.9

7.4

60.525.032.353.2

49.6-0.832.036.443.4

12.8 16.0 58.6 67.28.1 6.4 54.5 71.6

2.42.48.1

15.3

4.8-11.3-14.1

8.23.4

-26.42.43.24.8

- 0.8-15.3- 3.3

4.11.7

53.322.929.5

54.9

48.84.2

30.840.142.5

50.827.942.662.4

64.317.245.557.562.0

8.8 16.0 1.6 -- 18.7 38.41.6 23.4 6.5 1.6 34.2 40.0

1/ Per cent of banks reporting stronger loan demand minus per cent of banks reporting weaker loandemand. Positive number indicates net stronger loan demand, negative number indicates net weakerloan demand.

2/ Per cent of banks reporting firmer lending policies minus per cent of banks reporting weakerlending policies. Positive number indicates net firmer lending policies, negative number indicatesnet easier lending policies.

3/ Per cent of banks reporting less willingness to make loans minus per cent of banks more willing tomake loans. Positive number indicates less willingness, negative number indicates more willingness.

NOTE: 133 banks participated in the February 1967 Survey; 125 banks have participated in the surveyssince that time.

69.81.59.53.1

14.223.112.14.0

21.620.812.05.6

1.616.8

0.816.1

30.425.0

8.912.1

6.421.6

6.518.9

34.416.17.31.6

-0.810.52.5

11.6

93.656.832.832.8

28.064.830.056.9

-27.210.44.81.6

-1.66.4

-4.115.4

86.264.332.830.3

32.561.730.949.5

91.075.641.442.3

47.280.246.771.3

-5.6-5.6-5.610.6